Written by Alistair Driver
NFU president Minette Batters has called for assurances from Government over the impact of a UK-Australia Free Trade Agreement on UK farmers, after an Agreement in Principle was announced today.
Under the deal, tariffs on meat imports from Australia will be phased out over 10 years, with quotas then limiting volumes coming in for a further five years.
Announcing the deal, the UK Government said British farmers will be protected by a cap on tariff-free imports for 15 years, using tariff rate quotas and other safeguards. “We are also supporting agricultural producers to increase their exports overseas, including to new markets in the Indo-Pacific,” it said.
There was more detail in the Australian Government’s announcement, which said Australian farmers would receive ‘a significant boost by getting greater access to the UK market’, while consumers would benefit from cheaper products, with all tariffs eliminated within five years, and many tariffs, including on cars and whisky, eliminated immediately.
While 99% of Australian goods will enter the UK duty free when the agreement enters into force, tariffs on Australian agricultural goods will be phased out. Key details include:
- Beef tariffs will be eliminated after 10 years. During the transition period, Australia will have immediate access to a duty-free quota of 35,000 tonnes, rising in equal instalments to 110,000 tonnes in year 10.
- In the subsequent five years a safeguard will apply on beef imports exceeding a further volume threshold rising in equal instalments to 175,000 tonnes, levying a tariff of 20% for the rest of the calendar year.
- Sheep meat tariffs will be eliminated after 10 years. During the transition period, Australia will have immediate access to a duty-free quota of 25,000 tonnes, rising in equal instalments to 75,000 tonnes in year 10. In the subsequent five years a safeguard will apply on sheep meat imports exceeding a further volume threshold rising in equal instalments to 125,000 tonnes, levying a tariff safeguard duty of 20% for the rest of the calendar year.
- Sugar tariffs will be eliminated over eight years. During the transition period, Australia will have immediate access to a duty-free quota of 80,000 tonnes, rising by 20,000 tonnes each year.
- Dairy tariffs will be eliminated over five years. During the transition period, Australia will have immediate access to a duty-free quota for cheese of 24,000 tonnes, rising in equal instalments to 48,000 tonnes in year five. Australia will also have immediate access to a duty-free quota for non-cheese dairy of 20,000 tonnes.
Prime Minister Boris Johnson said: “Our new free-trade agreement opens fantastic opportunities for British businesses and consumers, as well as young people wanting the chance to work and live on the other side of the world.”
But the Australian deal has generated huge concern within UK agriculture, particularly for the beef and lamb sectors, which could face competition from lower cost imports produced to lower standards, but also because of gears it could set a template for future deals with the likes of the US and Canada, both major pork producers.
Production standards
Mrs Batters said: “While details remain very thin on the ground, it appears that the agreement will include important safeguards that attempt to strike a balance between liberalising trade and supporting UK farm businesses, as well as a reasonable time period to allow UK farmers to adjust to the new trading environment.
“We await further details of the agreement to understand whether these safeguards are sufficient, and in particular that they can be deployed effectively should imports rise to an unmanageable level leading to significant market disruption.”
But she expressed concern that today’s announcement appears to have made no mention of animal welfare and environmental standards.
“While the government has previously been keen to highlight how our Free Trade Agreements will uphold our high standards of food production, there has always been a question mark over how this can be achieved while opening up our markets to food produced to different standards,” Mrs Batters added.
“We will need to know more about any provisions on animal welfare and the environment to ensure our high standards of production are not undermined by the terms of this deal.”
She said it was now critical that the government engages with industry on the details of the deal as soon as possible and that Parliament is involved much more during the final stages of the negotiations to ensure it has sufficient oversight of the agreement. The Trade and Agriculture Commission will have a vital role to play, she added.
“This trade deal, and those that follow it, will, I hope, provide UK farmers with opportunities to export more great British food abroad, although we should be realistic about the extent of those prospects with large net-exporters such as Australia. We should also be clear about the likelihood that these deals will mean a significant increase in competition in our domestic agricultural markets,” she said.
“Looking ahead, it is vital that the UK Government approaches its other negotiations with countries like New Zealand, USA, Canada and Mexico – all major agricultural producers and exporters – on its own terms and ensures that future deals balance access to UK agricultural markets with at least the same level of opportunities for British agri-food exports. The cumulative impact of these deals could have a major impact on UK farming, and handled badly it may become impossible for some of our farm businesses to continue to compete.”
More reaction
NFU Scotland president Martin Kennedy said: “As detail on the proposed terms of agreement around an Australian trade deal emerge, deep concerns will remain about its impact on Scotland’s farmers, crofters and our wider food and drink sector.
“Under the proposed deal, there is to be a cap on tariff-free imports from Australia for 15 years. That is merely a slow journey to the Australians getting unfettered access to UK markets and with no guarantees that the promises of other safeguards will address the fact that very different production systems are permitted in Australia compared to here in the UK.
“The deal has not been afforded the appropriate level of scrutiny and consultation and has been agreed in advance of the promised statutory Trade and Agriculture Commission being established to scrutinise such deals. Parliamentarians must be given the opportunity to examine this deal, and any future deals, with Government carrying out a detailed impact assessment on what it may mean for the agriculture and food sectors.”
CLA Deputy President Mark Tufnell said: “It’s important that we are able to support free trade and farming as a nation and we welcome this deal in principle.
“But, in any deal we strike with other countries, it’s essential that imports meet domestic standards on food safety, animal welfare and the environment. Many are concerned of the volume of Australian beef entering the UK but, with only 0.15% coming onto the domestic market, it’s minimal. Instead, the focus should be on government putting suitable checks and balances in place to safeguard standards and production methods.
“Our farmers are subject to stringent environmental and animal health and welfare standards, so it would be totally unacceptable to allow them to be undercut by imports produced to lower standards. Farming in the UK is a business and needs to be globally competitive so these factors must be at the heart of this new deal with Australia.”
Soil Association Associate Director Farming Liz Bowles said UK farmers would feel betrayed. “Barely 24 hours after pledging more ambitious climate action through the G7 group, the UK has agreed a trade deal that threatens to offshore our climate impact and exacerbate the ecological emergency,” she said.
“Australian farmers are permitted to use growth hormones, prohibited pesticides, battery cages and sow stalls, and they are responsible for far more antibiotic use than producers in the UK. What happened to the Conservative manifesto pledge that there will be no compromise on our environmental, animal welfare and food standards?
“This deal has been agreed without adequate Parliamentary oversight or public scrutiny, and could pave the way for low standard, climate-destructive deals with other nations such as the United States and Brazil. The government’s promise of a cap on tariff-free imports for 15 years, plus tariff rate quotas and other safeguards, will offer scant reassurance to farmers who justifiably feel betrayed.”
Food and Drink Federation head of international trade Dominic Goudie said: “The UK and Australia are important trade partners when it comes to food and drink, with trade in our sector’s products worth more than £800m in 2020. The FDF therefore welcomes the news that the UK has agreed broad terms of a trade deal with Australia.
“Food and drink manufacturers will hope that this deal will remove burdensome and unnecessary barriers to trade that will provide a timely boost for our industry’s post-COVID recovery. The terms must also ensure that consumers have continued confidence that any agreement maintains the highest food safety and animal welfare standards.”
Joe Spencer, partner at MHA MacIntyre Hudson, said unfavourable trade deals would only add more pressure to UK farmers as they struggle to adjust to Brexit.
“UK farmers are increasingly being asked to offer protection for the environment, while the government is withdrawing support to them at the same time,” he said.
“Unfavourable trade deals – such as this latest one in negotiation with Australia – will only add more pressure to the sector which is working hard to move in one direction while, one might suggest, having the rug pulled out from under it at the same time.
“Farmers are right to be wary. Trade deals of the sort the government has negotiated with Australia offer few advantages to the sector and maybe only small benefits to consumers (in terms of lower prices). The sector (and the general public) will be paying close attention to the way these trade deals ensure food safety and livestock welfare standards.”
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